Learn the trade here. Make it on tradeMONSTER

Options Trading News

March 14, 2013  Thu 3:47 AM CT

BBY: SEE CHART GET CHAIN FIND STRATEGIES
Best Buy has gone on a surprising run this year, and one trader is betting that it has a bit more to go.

optionMONSTER's Heat Seeker system shows that a trader bought 2,500 April 22 calls for $0.73 and sold 5,000 April 24 calls for the bid price of $0.24. This is a new call spread, as the volume was well above the previous open interest of fewer than 500 contracts at each strike.

The call vertical, also known as a ratio spread because one strike saw twice as many contracts trade as the other, cost $0.25 to open. That is the maximum potential loss with BBY anywhere below $22, while the maximum gain would be realized with shares up at $24. Above that level, the faces the obligation to sell shares at that price. (See our Education section)

BBY gained 3.3 percent yesterday to finish at $20.96, its highest close since early July. The electronics retailer was at a 13-year low of $11.20 at the end of 2012 and has not closed above $24 in a year.
Share this article with your friends


Related Stories

BBY

Cramer: Best Buy, Macy's tell story

August 28, 2014

Both were pretty shocking, Macy's because it has been amazingly consistent and Best Buy because the commentary could not have been more negative.

BBY

Best Buy bulls bet on strong earnings

August 22, 2014

The electronics retailer plummeted in January on weak holiday sales but has been rebounding since, with earnings beating expectations in the two most recent quarters.

Premium Services

Education & Strategy

It's all skewed up

Most new option traders know little about implied volatility, and learn the hard way. Today we want to help you...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER